Extreme Couponing: Digital Edition

We’ve all seen TLC’s confessional show Extreme Couponing and the lengths to which consumers will go to save a buck. The digital world of discounts isn’t much different; instead of obsessively pouring over paper, customers scour daily deal sites like Groupon or impatiently wait for online discounts from their favorite retail sites. Though the daily deal trend has already hit its peak and is on the decline, there’s a constant competition between the sites still standing to provide the biggest discounts possible—50 percent just doesn’t cut it anymore.

Needless to say, this consumer mentality isn’t healthy for businesses. In the daily deal realm, deals closed with the merchant in mind can yield profitable results as well as a promising new customer base. However, deals closed for the sake of the site can drive businesses to bankruptcy. From a consumer standpoint, customers have become dissatisfied with full prices and will only purchase one-time discounts, never staying loyal to one brand but bouncing around to whichever merchant is offering the cheapest service that day.

Fortunately, the way consumers view deals is changing. Fondly dubbed “Coupons 2.0,” these coupons are now referred to as rewards and aim to make customers view the discount as a badge of honor rather than something they could simply search for online. One survey found that 92 percent of moms say they want to buy a product that supports a cause. Established companies have taken this in heed and are starting to offer discounts on their products by promoting the greater good. For instance, eBay and Coca-Cola have launched reward programs that benefit the environment. From the get-go, this enticed consumers by offering something for them to earn rather than something that was simply handed to them and therefore unappreciated. Couponing 2.0 instead transforms discounts into an indicator of social accomplishment.

By removing the negative connotation associated with coupons and spinning them into rewards, customers feel valued and connect stronger with the brand offering. After all, brands should work to build a faithful relationship with their customers.

One solid example of a successful business increasing customer loyalty through coupons 2.0 is eBay. In 2009, they created the eBay Green Team and within six weeks gained 100,000 fans. Initial testing showed that these customers were among eBay’s top-earning user base and, even more importantly, were eager to engage more with the brand. Now that number is three times larger and customers are involved in a variety of ways - by selling used golf balls, vintage designer clothes and more.

eBay also created the eBay Box - a reusable box with a shelf life of five deliveries. Customers could ship shoes from California to Virginia, where a customer could then unpack the shoes and deliver a book to someone else. Consumers were so enthralled with the eBay Box that they began writing letters to one another on the box’s sides and eBay enabled a tracking dashboard so customers could see where in the world their box was. So while lessening product waste, the box also successfully engaged clientele.

As panel host Samantha Skey stated, “Coupons are a branded experience; they drive bad consumer behavior with perpetual expectation of discounts.” Instead, replace discounts with rewards. “This generates brand loyalty and trains them to behave in a way that is advantageous for your business. Asking customers to earn discount confers greater value … that feeling of ‘you’re winning’ is pretty cool and saving the planet through a deal receipt is pretty powerful. It allows customers to feel that fleeting connection to a brand offering such a positive experience.”

Takeaway lessons:

1. Make it easy for the consumer

2. Know what they will and won’t do

3. Treat them like friends

4. Use your brand to your advantage

5. Constantly refresh your band and products

6. Don’t underestimate the power of cash or good timing

This article is part of Allvoices’ series on ad:tech, the largest digital marketing and technology conferences and expositions. Check out allvoices.com/adtech for more of Allvoices’ ad:tech San Francisco event coverage. This series is supported by ad:tech.